- Blackstone asked all its portfolio companies to regularly report ESG metrics to boards in May.
- The move comes as investors push private equity firms to bolster their sustainability credentials.
- Blackstone’s ESG head, Christine Anderson, broke down the firm’s ESG growth and hiring plans.
The race among private-equity firms to show investors they are serious about sustainability has been heating up.
Blackstone, the world’s largest alternative asset manager, is considering adding three executives to its corporate ESG team, Christine Anderson, Blackstone’s head of external relations, told Insider. The firm has been snapping up talent for its fast-growing ESG team this year, announcing the hire of five new ESG execs in early May.
The search for talent comes as investors ramp up the pressure for private equity firms to double down on ESG and impact investing efforts.
Blackstone made a major move toward bolstering its ESG initiatives when it asked all the CEOs of its portfolio companies to regularly report on sustainability measures in a letter, Reuters reported in May.
The initiative was also one of Anderson’s first, as she took on oversight of ESG at the firm after KKR poached Blackstone’s former global ESG head, Alison Fenton-Willock, in early May.
Anderson, said that when she joined the firm 12 years ago, she would informally meet with other employees who were interested in the budding field of “corporate social responsibility,” which culminated in the firm’s first sustainability initiative.
When president and chief operating officer Jon Gray took over in 2018, the firm honed in on a “renewed focus” on ESG issues, aiming to add further structure to its previous efforts.
The firm did not issue standardized reporting rules to all its portfolio companies when it widened the ESG reporting requirement to include them in May.
“We certainly gave them a little bit of guidance on the things that we care about, like diversity and sustainability, but we gave them a lot of leeway to do it the way they wanted to do it.”
However, companies in Blackstone’s real-estate division have been reporting sustainability metrics against The Global ESG Benchmark for Real Assets framework to their boards since 2019, she said.
Blackstone’s portfolio companies can report on ESG in a variety of forms, from verbal discussions with board members to Powerpoint presentations.
Portfolio companies log these metrics quarterly as part of their broader reporting process, Anderson said. Blackstone also administers an annual ESG survey for them to identify “some of the less quantitative items” like anti-discrimination policies.
Further standardization of the metrics companies use to assess their ESG efforts, however, would be helpful in ensuring accountability, Anderson said. Some of Blackstone’s portfolio companies are in the early stages of the reporting process and are still assessing what ESG factors are material to their business.
“Not all of these companies have had the luxury — they’ve been in a growth phase, and haven’t had the time to really address [ESG].”
Anderson said that Blackstone is encouraging these companies to make ESG a priority. The private-equity firm’s view of some topics within ESG, like its emissions program, require a more “granular” approach — the firm offers mechanical guides, seminars, and help from outside consultants and vendors, Anderson said.
It’s also considering further ramping up the support of portfolio companies by hiring ESG coverage leaders within its different business units, she added.
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